Over the last number of years, some of the major European meat processors were at a crossroads in terms of the direction their business was heading with the majority having no operations outside their domestic country, writes Peter Duggan, Strategic Information Services, Bord Bia-Irish Food Board.

This has represented a real challenge to expansion with the main players growing their business by expanding domestic production.

Some companies have restructured their business to concentrate on margin at the expense of volume according to GIRA’s Meat Panorama report, which focuses on developments among Europe’s largest meat processors.

In 2005, the top 15 European meat companies accounted for 23 per cent of EU-27 meat output at 9.9 million tonnes.

Following consolidation and expansion, the market share of the top 15 companies increased to 28 per cent or 12.1 million tonnes by 2010.

The leading meat processor in Europe in 2010 was Vion.

Despite being the main player on the European landscape, GIRA reports that Vion has faced increasing pressure from Tönnies in its pig processing business. This reflects the manner in which the German company is run in terms of strategic management and being a quality low-cost processor.

To grow meat market share in volume terms, Vion has relied on the poultry industry to drive the company forward, a sector in which it has only recently become engaged.

A significant lack of industry concentration is evident across most European countries. For this to change, some of the below factors will be crucial to changing this outcome according to GIRA:

Forward integration into secondary cutting and perhaps retail packing, and even further processing
Increase overlap between red meat (pig meat and beef), and poultry, and
Labour cost and availability issues – with automation being increasingly popular.